Visa Network’s Excess Capacity Fuels Innovation

By Tony Kontzer |
Posted 05-31-2013

By Tony Kontzer

Visa has a long history of being secretive about its data center operations. And while the payment-processing giant remains wary about revealing the precise locations of its two data centers—for obvious security reasons—it is no longer maintaining a shroud of secrecy over the capabilities of its multi-faceted network.

"We want people to understand what you can do with this incredible network that we've built," says Matt Quinlan, Visa's chief technology officer, while seated at a small conference table in his office at the company's Foster City, Calif., headquarters. "We've positioned the network to drive innovation in the ecosystem."

Lots of companies say such things, but Visa appears to actually mean them. The company's two data centers, one on the East Coast and one located in the Midwest, both of which have opened in the last decade, power a network that is capable of routing up to 30,000 simultaneous transactions through multiple locations, including external partner networks, and back to their points of origin in a mere 1.4 seconds. Not only that, the system also checks every transaction against 100 fraud detection parameters in real-time.

Visa’s network has never come close to reaching its 30,000 simultaneous transactions ceiling, topping off at 12,000 transactions. That excess network capacity is not an accident. Rather, it's Visa's very specific design to ensure lightning-fast results, and to accommodate innovation from its merchant, issuer and consumer development communities, which can tap Visa APIs to invent new ways for enabling and accepting payments.

The network’s excess capacity also allows Visa to produce its own innovative services, such as the launch earlier this year of a managed mobile money service built with technology the company acquired in its 2011 purchase of Fundamo. The new service enables merchants and banks to accept and process mobile-to-mobile SMS-based transactions in developing nations where large portions of the population do not have a bank account.

No matter how many data sources Visa's infrastructure is asked to accommodate, Quinlan says that the data can only move as far as the length of a thumb before the network craves more.

"The speed of light is no longer fast enough," says Quinlan, a possible indication that real-time transaction processing is the company’s near-future goal.

While the network’s excess capacity might sound technologically over the top, the performance enabled by so much extra capacity is critical when your company processes 80 billion transactions a year, as Visa does. With the business guarantees it provides to credit card issuers, merchants and consumers, Visa has no room for technological error. Whether it's authorizing transactions, monitoring fraud, or serving up reports, the network has to perform.

"We have to deliver that through the technology," Quinlan says.

And that technology is steadily evolving toward a converged infrastructure in which all of the data center components—servers, storage and network—function as a single, manageable framework. That converged infrastructure setup is ideal for enabling things like pooling of resources, automated provisioning, and the ability to scale capacity up or down. In other words, it's evolving into a cloud computing platform as Visa prepares for the next wave of innovation.

If it sounds like Visa is more bullish than ever on digital payments, there's a reason for that.

"Our biggest competitors that we recognize are cash and checks," says Quinlan.

In many ways, that's always been the case; Visa has traditionally benefited from consumers choosing plastic over cash. But as the ability to pay for so many product and services in so many convenient ways—e-commerce, mobile commerce, PayPal, micropayments and more—continues to grow, the pressure to supplant cash and check payments gets more intense.

For that reason, Quinlan says Visa's network is increasingly configured to support as many different types of transactions as possible.

"At the heart of it, the network enables value exchange," he says. "Value can come in many forms. Today it's money. Tomorrow it could be loyalty points."

Whatever form value comes in, Visa wants the world to know two things: its network is ready, and it has no intention of being left out of the game.